Why the wine industry is raising a cautious glass to the drought

The drought may end up being a good thing for the wine industry‚ says Wines of South Africa CEO Siobhan Thompson.

Speaking to the website the drinks business in London‚ Thompson said it was an opportunity for “right-sizing”. But she warned that lower yields would mean higher prices.

“Of course there will be wine‚ and good quality wine‚ but there will be less to supply in bulk at the lower end‚ and most definitely there will be a weighing of the scales in terms of how much is sold locally and internationally‚ and there will be a need to push up prices‚” she said.

Thompson told the website that industry body VinPro had forecast a 90 million-litre shortfall this season‚ which may help to address profitability problems in the industry.

Only about one in seven of South Africa’s 3‚160 producers were making a profit‚ she said‚ and almost half were losing money.

“We will have to ask for price increases; at the end of the day we need a more profitable industry to invest back into planting and people‚” she said.

Commenting on the drinks business article‚ Voor Pardeberg wine farmer Edwin Doran said: “To give you a real idea of what has been happening‚ four years ago we had to open sluices in our dam to release water. Between that year and last‚ our production was down 37.5% even though we added another 8ha of vines.

“Last October‚ we bought R140‚000 worth of water from the local council. They literally opened the taps on the local river and drained the water into our main dam. If we didn’t have a borehole and two dams‚ Lord knows where we’d be.”